How Customer Service Drives Customer Loyalty

How Customer Service Drives Customer Loyalty

Think back to your most positive customer service experience.  What made it such a good one?  Now, think about your worst experience related to customer service or lack thereof.  What made it such a nightmare?

The chances are you described your most positive customer service experience as one in which you interacted with representatives who listened and seemed to care about helping resolve the issues you brought before them.  You might have even described the customer service representatives as people who were helpful, friendly, and supportive in making appropriate recommendations.  And, in an ultimate customer service experience, you may have described the representatives as competent, efficient and articulate.

Dream on, you say?  Customer service has become extinct in this day and age?  That may be, but it is not difficult to re-energize the customer service team in your organization to gain a significant competitive advantage.

In successful customer service initiatives, the goal is to promote customer satisfaction.  No longer is this done by attracting new customers and making the sale; customer satisfaction is achieved by developing relationships.

“A single purchase experience can leave a lasting on how the consumer identifies with the retailer, so it’s imperative that retailers enhance how they serve customers to minimize potential hurdles from beginning to end,” says Susan McPartlin, of a retail consulting firm.

Customer service is not just something provided in call centers.  Anyone interacting with the end user of a product or service is involved in the delivery of customer service.  As such, everyone in the organization must work to ensure delivery of core business values.

Hiring the right people for the right position in the right job influences the potential for employee engagement.  If employees are passionate about what they do and the business they are in, they will deliver products and services that exceed expectations.  Employee passion is contagious and stimulates customer satisfaction and return business.

Business at Trader Joe’s is often described as an experience for adventurous food and beverage shoppers.  Crew members, or employees, are recruited for their enthusiasm and energy; they are then trained to impart product knowledge, promote teamwork, leadership, and communication.  The Trader Joe’s product guarantee is ‘We tried it!  We liked it!  If you don’t, bring it back for a full refund, no questions asked.’  This underscores the store’s desire to establish a personal relationship with the customer.

In addition to relationship building and employee training, the tenets of customer service could just as easily be based on civility, common sense, and the Golden Rule.  Eliminate policies that hurt your customers; do more to keep customers happy.  How simple.  How effective.

In his book, Win the Customer, Not the Argument, Don Gallegos details why and how excellence in customer service can be integral to any business.  Gallegos describes an angry customer returning a gallon of milk to a grocery store.  The customer service team was trained to give a full refund, no questions asked.  Even though the milk carton had a label from a competitor, the customer service team took care of the customer and issued a refund, earning a lifetime of loyalty.

Your people, and their ability to communicate effectively and strategically, are keys to effective customer service.  A customer service team able to handle complaints pleasantly and to diffuse a frustrating situation in a calm and timely way will go far in differentiating your organization from others.

Customer loyalty is not just about repeat business.  Customer loyalty exists when a customer chooses to do business with a company even when a less expensive, more convenient, or higher quality alternative is available somewhere else.

It is no secret that retaining existing customers is less costly than recruiting new customers.  That means cultivating customer loyalty is critical to the financial success of any business.

Involving both customers and employees in developing standards for customer service promotes buy in from these important stakeholders.  Conduct employee training to establish expectations in the delivery of customer service.  Strive to provide courteous, efficient, and prompt service.  Make sure customers have the full, undivided attention of employees and treat each customer as an individual.

Anything an organization can do to un-complicate things for the customer leads to customer satisfaction and loyalty.  Establishing multi-channel strategies makes it easy for customers to shop online or in stores.  Creating free shipping and flexible return policies helps eliminate customer anxiety.

In November 2011, Supermarket News reported that several factors influence purchasing decisions, including price (55%), past experiences (21%), brand (14%), and convenience (7%).  The article went on to describe key components of a good shopping experience, which included staff support (56%), quality (46%), accessibility (2%), and presentation (2%).

When shopping at Kohl’s, Michaels, or Bath & Body Works, customers are given a Repeat Receipt, which offers a discount if customers return to the store within a short time period.  Customers already in the stores are rewarded with future savings.

“Customers, like all of us, are social beings, seeking connection and community,” said Lisa Feigen Dugal, U.S. Retail and Consumer Practice Advisory Leader with a retail consulting firm.  “When retailers move beyond solely relying on loyalty card points and develop experiences based on what’s most important to consumers, they not only drive loyalty, but create ultimate brand ambassadors who spread the word on their positive experiences.”

In other words, do the right thing, do things right, and treat the customer better than you’d like to be treated.  Excellence in customer service will bring repeat business through your doors.

The customer supply chain is a long one, with customers both internal and external to the organization.  Conducting customer service surveys of all customers in the chain helps to identify quality of service, timeliness of service, promptness of service, and satisfaction with facilities in terms of cleanliness, hours, payment methods, parking and general access.  Then, resurvey periodically to gauge the effectiveness of your improvement initiatives.  Understanding customer needs and expectations is a prerequisite to providing an excellent customer service experience.

If you would like to learn more about how NBRI can help you measure ways in which customer service drives customer loyalty, contact us now at 800-756-6168.

Terrie Nolinske, Ph.D.
Research Associate
National Business Research Institute
Plano, Texas